Contractionary monetary policy tends to push the U.S. price level:

Question

Quizplus · Accepted Answer

Contractionary monetary policy typically involves increasing interest rates or reducing the supply of money in the economy, which can lead to a decrease in the price level as borrowing becomes more expensive and spending decreases. Additionally, higher interest rates can attract foreign investors looking for higher returns, increasing demand for the domestic currency and thus raising the exchange rate.

Contractionary Monetary Policy Tends to Push the U